theoldpretender:


NB: This is not a defence of the government, but an explanation if you will of why we should stop being a monoeconomy.

And with that...here is why the $81 oil price won't improve Nigeria's economy

1.We need oil to be at $140 per barrel to be able to have a balanced budget. $81 does not even reach that threshold.

2.Because oil has been below the $140 threshold since the government took over....we will still need to takeloans, and we will continue to take loans until oil reaches the breakeven point of $140...and even after that, we will still be paying back loans.

3.That is how we have been operating since long before 1999. No matter how high or low oil is, we always would keep on taking loan after loan UNTIL we reach the breakeven price...and even then....

4.Even during the last oil boom of 2011-14, because oil was not at the breakeven for those years....we still took loans.

5.The only way forward is simple. We have to

a) End subsides, so that we can save more money and encourage investment...which means more jobs. Yes, fuel will goup....but more investors ,local and foreign will come in, and jobs will be saved.

b)Take strategic loans for power and transport alone...so that we can improve things.

c) End price controls in the power sector. DISCOS cannot make much money on power bills of N2000 a month for metered houses. That way,more money and investment flows into the power sector.

d) Cliche...but we must really 'pight kwarrupshion'.

theoldpretender:


NB: This is not a defence of the government, but an explanation if you will of why we should stop being a monoeconomy.

And with that...here is why the $81 oil price won't improve Nigeria's economy

1.We need oil to be at $140 per barrel to be able to have a balanced budget. $81 does not even reach that threshold.

2.Because oil has been below the $140 threshold since the government took over....we will still need to takeloans, and we will continue to take loans until oil reaches the breakeven point of $140...and even after that, we will still be paying back loans.

3.That is how we have been operating since long before 1999. No matter how high or low oil is, we always would keep on taking loan after loan UNTIL we reach the breakeven price...and even then....

4.Even during the last oil boom of 2011-14, because oil was not at the breakeven for those years....we still took loans.

5.The only way forward is simple. We have to

a) End subsides, so that we can save more money and encourage investment...which means more jobs. Yes, fuel will goup....but more investors ,local and foreign will come in, and jobs will be saved.

b)Take strategic loans for power and transport alone...so that we can improve things.
Br
c) End price controls in the power sector. DISCOS cannot make much money on power bills of N2000 a month for me
tered houses. That way,more money and investment flows into the power sector.

d) Cliche...but we must really 'pight kwarrupshion'.

theoldpretender:


1.In other words, you want the South to get more oil money (I am a Southerner by the way, so no objection).

2.That would make the South more dependent on oil

3.That would mean the South would be wrecked economically when oil prices drop again.

4.Agricuture and solid minerals are also subject to prcie drops. Zambia is reliant on copper. From 2006-12 copper was at an all time high. Since 2012...copper has fallen in price.Guess what happened to Zambia's economy.

5.We need to become a manufacturing economy,not a raw material exporting country that exports raw materials to other countries who will use them to make products for billions more in revenue...which we won't see.

theoldpretender:


Except that it was a partial removal.

Hint: They (the government) were still setting the price.(That's why I did not believe that report then, and now).

And now confirmed by a report some time ago saying that subsidy was still being paid on fuel at the rate of N65 per liter.

(And landing costs are now at N180 for imported fuel.....)

Governments have done this from time to time (GEJ for example in 2012 did the same thing when he raised prices from N65 to N140,and then reduced things to N97.).

The cold reality is that governments, including this one, so dont want to deregualte because if they do, it would be expensive...politically. If the govt is serious...they would allow marketers to set the price, and stop paying subsides, and make NNPC more accountable. Simple.

justice212:
Nigerians are only good at hearing the price but not we are not good in seeing the effect of the money on common man.

wink2015:


UNTIL NORTHERN NIGERIA AGREE TO RESTRUCTURING, FISCAL FEDERALISM, RESOURCE CONTROL, NIGERIA WILL CONTINUE TO WOBBLE INSPITE OF THE PERIODIC RISE IN CRUDE OIL IN THE INTERNATIONAL MARKET.

Northern Political leaders have kept Nigeria down for decades with their special "MILITARY BRAND FEDERALISM" which keep the majority of the oil money at the centre with the federal government dishing out stipend call "ALLOCATION" to states.

It is high time Northern Nigeria with their vast land return to Agriculture and solid minerals.

This everything Federal! Federal! Federal! must STOP!

Power should be devolved to the states for them to use their resources to grow at their own level.

Even with the present increase in crude oil price, not much will be achieved because of our battered federalism that chooses to favour one part of the country.

theoldpretender:


NB: This is not a defence of the government, but an explanation if you will of why we should stop being a monoeconomy.

And with that...here is why the $81 oil price won't improve Nigeria's economy

1.We need oil to be at $140 per barrel to be able to have a balanced budget. $81 does not even reach that threshold.

2.Because oil has been below the $140 threshold since the government took over....we will still need to takeloans, and we will continue to take loans until oil reaches the breakeven point of $140...and even after that, we will still be paying back loans.

3.That is how we have been operating since long before 1999. No matter how high or low oil is, we always would keep on taking loan after loan UNTIL we reach the breakeven price...and even then....

4.Even during the last oil boom of 2011-14, because oil was not at the breakeven for those years....we still took loans.

5.The only way forward is simple. We have to

a) End subsides, so that we can save more money and encourage investment...which means more jobs. Yes, fuel will goup....but more investors ,local and foreign will come in, and jobs will be saved.

b)Take strategic loans for power and transport alone...so that we can improve things.

c) End price controls in the power sector. DISCOS cannot make much money on power bills of N2000 a month for metered houses. That way,more money and investment flows into the power sector.

d) Cliche...but we must really 'pight kwarrupshion'.

theoldpretender:


NB: This is not a defence of the government, but an explanation if you will of why we should stop being a monoeconomy.

And with that...here is why the $81 oil price won't improve Nigeria's economy

1.We need oil to be at $140 per barrel to be able to have a balanced budget. $81 does not even reach that threshold.

2.Because oil has been below the $140 threshold since the government took over....we will still need to takeloans, and we will continue to take loans until oil reaches the breakeven point of $140...and even after that, we will still be paying back loans.

3.That is how we have been operating since long before 1999. No matter how high or low oil is, we always would keep on taking loan after loan UNTIL we reach the breakeven price...and even then....

4.Even during the last oil boom of 2011-14, because oil was not at the breakeven for those years....we still took loans.

5.The only way forward is simple. We have to

a) End subsides, so that we can save more money and encourage investment...which means more jobs. Yes, fuel will goup....but more investors ,local and foreign will come in, and jobs will be saved.

b)Take strategic loans for power and transport alone...so that we can improve things.

c) End price controls in the power sector. DISCOS cannot make much money on power bills of N2000 a month for metered houses. That way,more money and investment flows into the power sector.

d) Cliche...but we must really 'pight kwarrupshion'.

AlphaT1:

APC told us they removed subsidies and so price of PMS must be increased from 97 to 145 naira....I am not understanding this government of Mr integrity oo..

theoldpretender:


1.In other words, you want the South to get more oil money (I am a Southerner by the way, so no objection).

2.That would make the South more dependent on oil

3.That would mean the South would be wrecked economically when oil prices drop again.

4.Agricuture and solid minerals are also subject to prcie drops. Zambia is reliant on copper. From 2006-12 copper was at an all time high. Since 2012...copper has fallen in price.Guess what happened to Zambia's economy.

5.We need to become a manufacturing economy,not a raw material exporting country that exports raw materials to other countries who will use them to make products for billions more in revenue...which we won't see.

omoelerin1:
Your analysis is wrong.
The major excuse of buhari during economic downturn in 2016, was the drop in the price of crude oil and failure of Jonathan's govt to save for the raining day despite that the price of crude oil was above 120 dollars. If it is true that the price of crude oil must be around 140 dollars before we can have budget performance, then why blaming Jonathan for not saving anything?

Listen, Nigeria does not have any excuse for its underdevelopment considering its oil revenue. Nigeria is one of the richest country in term of oil dollars and it still remains underdeveloped and one of the largest number of poverty ravaged citizens in the world.

When did oil subsidy become the bane of unemployment in Nigeria? Is it 2000 naira paid by metered house responsible for lack of investment in power sector? Our major challenge in the power sector is not DISCO. Between generation and distribution, which one is our major problem?
How can a reasonable person suggest that subsidy removal and increase in power tariff are the solution to Nigerian economic challenges?

theoldpretender:


NB: This is not a defence of the government, but an explanation if you will of why we should stop being a monoeconomy.

And with that...here is why the $81 oil price won't improve Nigeria's economy

1.We need oil to be at $140 per barrel to be able to have a balanced budget. $81 does not even reach that threshold.

2.Because oil has been below the $140 threshold since the government took over....we will still need to takeloans, and we will continue to take loans until oil reaches the breakeven point of $140...and even after that, we will still be paying back loans.

3.That is how we have been operating since long before 1999. No matter how high or low oil is, we always would keep on taking loan after loan UNTIL we reach the breakeven price...and even then....

4.Even during the last oil boom of 2011-14, because oil was not at the breakeven for those years....we still took loans.

5.The only way forward is simple. We have to

a) End subsides, so that we can save more money and encourage investment...which means more jobs. Yes, fuel will goup....but more investors ,local and foreign will come in, and jobs will be saved.

b)Take strategic loans for power and transport alone...so that we can improve things.

c) End price controls in the power sector. DISCOS cannot make much money on power bills of N2000 a month for metered houses. That way,more money and investment flows into the power sector.

d) Cliche...but we must really 'pight kwarrupshion'.

theoldpretender:


1.See my point 4.
2.Somehow....Bubu did save something even with low oil prices.(which is why some of us are annoyed with GEJ for not saving). But the thing is GEJ found it harder to save because we had to pay for subsidy and we also had to keep the naira afloat. Bad economic practice...but even if GEJ saved, and even with Bubu saving...that does not mean Bubu is running a good economy. Saving only keeps the evil day away. Had GEJ saved....it would be good...but our economy would have still been bad

theoldpretender:


1.See my point 4.
2.Somehow....Bubu did save something even with low oil prices.(which is why some of us are annoyed with GEJ for not saving). But the thing is GEJ found it harder to save because we had to pay for subsidy and we also had to keep the naira afloat. Bad economic practice...but even if GEJ saved, and even with Bubu saving...that does not mean Bubu is running a good economy. Saving only keeps the evil day away. Had GEJ saved....it would be good...but our economy would have still been bad.



We produce the same amount of oil as the UAE. We also have a population of 200million compared to the UAE's 12 million. Of course...Dubai has the nice skyscrapers and nice living...while we have the poverty. A good reason to diversify not so?



1.Our GSM sector was allowed to set prices the way they wanted...ie deregualted (unlike NITEL that was run on cheap subsidzed bills)..and as a result they had the money to pay for infrastructurre and improvements. And initially prices were high. (My dad's MTN line cost him N10000 in 2003. Today, it would cost N1000.).

2.If we deregulate....the oil downstream sector....yes, fuel will cost N200 and above. BUT....foriegn investors, and local investors will pour in, and eventually prices will drop....BECAUSE oil companies will now have the cash to ivnest in facilities. (Subsidy essentially means government dictates how much money a marketer earns. Which is something most Nigerians won't like if the govt does it for their own businesses)

3.Power has been privatised...so DISCOS and GENCOS have to raise money for themselves and the Transmission sector...which is government run. Problem is, they are not riasing enough from the bills...and as a result are owed hundreds of billions of naira from Nigerians and their givernment. And government is fixing prices for them. Tell me...how are they going to earn money to make a living.

Now I am going to ask you a question....would you like it if government came and told you how you must sell your products and how much profit you must make?

4.And the truth is, we are not earning enough from oil We are wasting it on subsides , oil inclusive...most of which is imported. Or why was GEJ your hero thinking of increasing fuel prices in 2012? Because the truth is, even then, we do not have enouigh money....unless oil is above $140 per barrel.

4Play:


You are being disingenuous if you claim that Buhari saved money. If by savings you mean the increase in forex reserves, this is inexcusably naive. At significantly depreciated exchange rates, of course you can accumulate higher forex reserves due to increased constraints in Nigerians affording imports. It's like cutting the feeding of your children and proclaiming that you have saved money as a result as their malnourishment increases.

So, comparing forex reserves at different Naira exchange rates is misleading: it is why Abacha oversaw an increase in reserves of nearly 1300% at one point as the value of the Naira imploded and poverty rates skyrocketed.

The original point made in the first page still stands: the rise in oil prices exposes the lies popular in the GEJ era suggesting that there was this vast pool of oil revenues being pilfered at the time (remember Sanusi's missing $20bn) and which, once Buhari is elected, would become available for welfare policies. There was never any such money.

This is not to absolve GEJ of responsibilities. As with every Nigerian president, he was venal and incompetent. The biggest policy error in his time was the increase in public sector wages - it is this that constituted the biggest expenditure in government budgets undermining the government's ability to balance the budget. This became more acute as oil prices collapsed.

theoldpretender:


NB: This is not a defence of the government, but an explanation if you will of why we should stop being a monoeconomy.

And with that...here is why the $81 oil price won't improve Nigeria's economy

1.We need oil to be at $140 per barrel to be able to have a balanced budget. $81 does not even reach that threshold.

2.Because oil has been below the $140 threshold since the government took over....we will still need to takeloans, and we will continue to take loans until oil reaches the breakeven point of $140...and even after that, we will still be paying back loans.

3.That is how we have been operating since long before 1999. No matter how high or low oil is, we always would keep on taking loan after loan UNTIL we reach the breakeven price...and even then....

4.Even during the last oil boom of 2011-14, because oil was not at the breakeven for those years....we still took loans.

5.The only way forward is simple. We have to

a) End subsides, so that we can save more money and encourage investment...which means more jobs. Yes, fuel will goup....but more investors ,local and foreign will come in, and jobs will be saved.

b)Take strategic loans for power and transport alone...so that we can improve things.

c) End price controls in the power sector. DISCOS cannot make much money on power bills of N2000 a month for metered houses. That way,more money and investment flows into the power sector.

d) Cliche...but we must really 'pight kwarrupshion'.

onlytiles:





why are you people like this? you complained that at $80-$90. GEJ could have turned Nigeria to Paradise that everything was difficult because you met oil at $30. now oil is at an all time high look at lengthy analysis you are giving to justify your masterr's impending failure to lift Nigeria out of it's economic quagmire



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theoldpretender:


You did not read my post well...especially point number 4.

Thing is, even at high or low oil prices, we are not running a good economy...we are running a bad economy based on the price of oil.

Expanding on the GEJ should have saved argument...it really does not matter if he saved or not.GEJ saving means that the recession we face now would have been delayed for a year. Buhari saving means that we just have enough money to keep us from being like Venezuela.It does not mean we have a stable economy.

Also, we need oil to be at $140. In 2014 we needed it to be above $130 (That is why GEJ kept on taking loans...because oil was not at the breakpoint. Another reason was that we Nigerians forced him to waste money on subsidies. Then there is corruption and poor fiscal management as well. )

All in all...we need to get off oil. That is the point I am trying to make...but you miss it because you people are allabout PDP and APC..

djon78:



From your own understanding, how will Nigeria get off oil? Because this statement has always been repeated. So How?